Consumer eViews

Volume 2, Number 6, February 7, 2005    

As Florida's chief financial officer, I have asked for a freeze on all insurance rate increases for homeowners policies. 

After hearing that the Office of Insurance Regulation approved double-digit rate increases on homeowners just last summer, I understand that Nationwide has submitted a second round of rate requests – an average 28.3 percent for homeowners and in excess of 100 percent for mobile homes. 

I’m extremely concerned that there is a trend with companies, including Nationwide, trying to recoup their losses from the hurricanes or raising their rates so policyholders are forced to drop coverage.

Homeowners who have suffered losses from the four back-to-back storms should not be victimized a second time.  Insurance companies should not be in a rush to raise rates. 

The prudent thing to do is to slow down and consider the consequences of rate increases on storm victims who are not able to handle an additional financial burden.

That’s why I’m asking state regulators to hold off approval of pending and future rate increases.  

The market needs to stabilize and state lawmakers should have the opportunity to act on recommendations for insurance reform that will help offset the need for rate increases.

On another note 

For 79 years Americans have celebrated Black History Month, and this year there is much to celebrate. 

I am thinking particularly about what is occurring this week in negotiations to advance peace in the Middle East.  America’s first black female Secretary of State is on the verge of negotiating a real peace deal. 

Condoleeza Rice was a young girl when black men and women were still struggling for her right to work hard and earn the position she now holds.  And, as a result, we have a bright and accomplished woman helping to lead the struggle for freedom around the world.

Black History Month continues through the end of February.  I urge all of us to think about the importance of that history to the future of the country and the world. 

                      -- Tom Gallagher


Just three weeks after the Department of Financial Services launched its Multiple Deductible Reimbursement Program, more than 400 checks totaling $600,000 are being mailed this week, Florida’s Chief Financial Officer Tom Gallagher told Governor Jeb Bush and members of Florida’s Cabinet today. 

The money, as appropriated by state lawmakers, will help reimburse storm victims for deductible losses.  The department has received over 11,000 applications in the last 10 days.

Gallagher raised concerns that more than 10 percent of the applications are being submitted without a social security number, which is needed to process them.  Another 5 percent are coming in without necessary signatures.

“We have much work left to do, but Florida has come a long way in recovering from the unbelievable hurricane season we were hit with,” said Gallagher, who oversees the department.  “But the good news is that claims are getting paid and rebuilding is under way.”

Gallagher shared the news while providing an update on the progress of insurance companies paying storm claims and the department’s hurricane mediation program.  According to Gallagher, 87 percent of the 1.6 million hurricane claims filed as a result of last year’s four back-to-back storms have been settled.  The storms combined have resulted in estimated insured losses of $21.4 billion to date.

Gallagher initiated the mediation program to provide a dispute-resolution process free to homeowners who need help resolving hurricane claims to avoid more costly options, such as going to court.   Nearly 5,000 storm victims have applied for mediation.  Of cases completed, more than 1,300 have resulted in an additional claims payment – a settlement rate of 93 percent. Approximately 3,700 cases are still pending.

The department has received more than 200,000 calls for help from consumers seeking help in understanding their policy coverage or filing a claim.  

“We are committed to helping Floridians emotionally and financially battered by these storms get back on their feet as quickly as possible,” Gallagher said. 

For more information, consumers can call 1-800-22-STORM.


At the February 1st Cabinet meeting, Treasurer Gallagher, Governor Bush and the other members of the Florida Cabinet recognized the accreditation of the Office of Financial Regulation by the National Association of State Credit Union Supervisors (NASCUS.)  

In order to receive NASCUS accreditation, an agency must demonstrate high levels of proficiency in department administration, personnel, training, examination, supervision and legislative powers.   

Florida became the 28th state in the Nation to receive this designation recognizing high credit union regulatory standards.  This recognition further demonstrates the safety and soundness of Florida’s 101-chartered credit unions. 


Florida Comprehensive Annual Financial Report (CAFR) is a detailed financial report which includes financial statements presenting the financial condition of the state at fiscal year-end and the results of operations for the fiscal year.  The CAFR was prepared in conformance with generally accepted accounting principles applicable to state and local governments.  The basic financial statements within the CAFR have been audited by the Auditor General.

The CAFR provides information which is used by investment companies such as Moody's Investors Services and Standard and Poors Corporation to determine the state's fiscal integrity and set bond rates.  The 2004 report is now available online and in print.

The CAFR is available on the Department of Financial Services’ web page at

Previous years' reports are also available on the web site.
Below is the 2004 CAFR Table of Contents.

State of Florida
Comprehensive Annual Financial Report (CAFR)
Fiscal Year Ended June 30, 2004

Entire CAFR
Table of Contents

Introductory Section
Financial Section Statistical and Economic Data


More than a dozen South Florida customers also face charges

A man who sold fake motor vehicle insurance cards to nearly 200 South Florida drivers has been sentenced to three years in prison, and more than a dozen of his customers are now facing charges that they knowingly presented the false insurance cards.

Howard M. McKinon, 58, of 481 W. 30th St., pleaded guilty to nine counts of marketing a false or fraudulent motor vehicle insurance card and one count of organized scheme to defraud.  The charges stem from an investigation by the Department of Financial Services, Division of Insurance Fraud.  The Palm Beach County State Attorney’s Office prosecuted the charges.  The sentence was handed down on Monday.

“This individual put many Floridians at risk beyond those he sold these cards to, and I’m glad that those who knowingly colluded in the scheme are also being held accountable,” said Florida’s Chief Financial Officer Tom Gallagher, who oversees the department.

It is a third-degree felony to create, market or present a false or fraudulent motor vehicle insurance card, punishable by up to five years in prison on each count. 

State fraud investigators determined that McKinon issued at least 196 cards, most of them to drivers in West Palm Beach and Riviera Beach.  Others were traced to Boynton Beach, Jupiter, Palm Beach Gardens, Belle Glade, Delray Beach, Lake Worth, Wellington, Palm Springs, Lake Park, and Mangonia Park.   

The cards appeared to be issued by Progressive Insurance Company and purported to carry the minimum statutory levels of Personal Injury Protection and Property Damage coverage.  The cards had the same policy number, with different personal and vehicle information typed on them.  The Palm Beach County Tax Collector’s Office, the Department of Highway Safety and Motor Vehicle (DHSMV) Bureau of Financial Responsibility, and Progressive’s Special Investigative Unit all assisted in the investigation. 

Consumers should buy coverage from a licensed insurance agent.  To check licensure of an insurance agent or company, log on to or call the department’s Consumer Helpline at 1-800-342-2762.


Each one of us is a consumer – and we all need help with a question or complaint from time to time.  

This week is National Consumer Protection Week.  While the focus of the week is on identity theft, the country’s fastest-growing crime, I believe it is also an opportunity to thank those who are committed to providing consumer assistance. 

In all that we do at the Department of Financial Services, protecting the rights and interests of Floridians is our goal. 

Our consumer specialists in the Division of Consumer Assistance helped more than 418,000 Floridians last year with information to questions, and opened 94,000 complaint files, almost half dealing with hurricane-related issues. 

We were among the first response teams to report to Disaster Recovery Centers, and we staffed a special hurricane assistance line. 

Sometimes the calls we get cross the line from complaint to report of a crime. 

For several consecutive years the department’s Division of Insurance Fraud has led the nation in insurance fraud arrests and convictions.  

Last year, investigators arrested 587 individuals for insurance fraud and related criminal activities. 

Insurance fraud affects not only those individuals directly harmed, but every consumer pays for it through higher insurance premiums and higher costs for goods and services – as much as $1,400 a year for every Florida family. 

The Division of State Fire Marshal also investigates crimes against Floridians – those that involve arson.


Millions of dollars of property are destroyed by fire every year – more than $265 million worth of damage in 2003 – and more than 100 Floridians die every year from fire-related injuries.


Consumer Services HelpLine
(800) 342-2762.